How to Register for an EIN

For the video tutorial, click here:

If you’re thinking about starting a new business (or legitimizing a current one), it’s important to start off on the right foot. That entails setting up an relationship between your business entity and the IRS. To do this, you’ll need an EIN, which is effectively the business equivalent of a social security number.

If you’re unsure of what type of business entity you want to set up, you can see this article on LLCs vs. Sole Proprietorships. Of course, there are other types of business formations – some of these include S Corps and B Corps, 501c-3 non-profit entities, and Limited Liability Partnerships [LLPs]. It’s important to note that the method of submitting tax returns and registering with your state will vary based on the form of business entity.

The EIN, however, works the same between all of these forms of business.

The IRS provides an online tool to establish your EIN

You can visit this link to get started. Then click the button for “Apply Online Now.”

From there, you’ll need to select the type of business entity you wish to establish. For most, this will be the Sole Proprietorship or the LLC. Note that a Sole Proprietorship can later be converted to an LLC, but an LLC can not be converted into a Sole Proprietorship.

This is what the IRS has to say about LLC’s:

“A limited liability company (LLC) is a structure allowed by state statute. An LLC is formed by filing articles of organization with the individual state’s secretary of state. Owners of an LLC are called members. Members may include individuals, corporations, other LLCs, and foreign entities. An LLC can be formed by one or more members, and there is no maximum number of members.

There can be no more than one active LLC with the same name in the same state.”

If forming an LLC, you’ll need to ensure that no other LLC is registered with your desired name in your state. Here are a few state registry examples [for other states, just google “______ Secretary of State Business Search”

Colorado: Secretary of State, CO

California: Secretary of State, CA

Wyoming: Secretary of State, WY

Delaware: Secretary of State, DE

Important: Now would be a good time to see what your desired state of incorporation charges to file the initial paperwork. You can view this page for a state-by-state break down of those charges.

To register an EIN for a Sole Proprietorship, you can read the next section and ignore the “number of owners” instructions. You can also skip over the “Articles of Organization” section.

Registering an EIN for an LLC should take 10 minutes or less

After selecting the LLC formation on the IRS tool, it will ask you how many members your LLC will have. Note that if you select two or more members, you will need to file 1065 forms each year in addition to submitting Schedule K-1s to each member. (The Tax Guru offers these services)

If you select just one member, your LLC will be taxed as if it were a sole proprietorship – via a Schedule C on your individual tax return.

From here, you’ll enter your name and social, followed by your business physical address (located in the state where you will file your Articles of Organization). You can set a different mailing address located anywhere you desire to receive IRS communications.

Finally, you’ll input the LLC name, a D.b.a. (doing business as) name if applicable, the county where the LLC is located, and the LLC start date.

For LLCs you must file Articles of Organization with your state

Of course, an LLC can be located in any state – even if you do not reside there. There may be some benefits to forming in particular states (e.g. Wyoming does not have state income taxes or require state return filings)

Wyoming charges $100 for the initial filing and $50 for annual reports. If your state charges significantly more than this, you may want to consider filing your Articles of Organization in Wyoming.

Nevada and Delaware are also popular choices for LLC formation, though these states charge higher initial filing fees and annual report charges.

See this guide for filing your Articles of Organization in Colorado.

See this guide for filing your Articles of Organization in Wyoming.

Now that you have an EIN, you can apply for business banking accounts

Most banks and creditors will require your EIN as well as your Articles of Organization to get started. They may also request your personal social security number, especially if you are requesting credit. You can expect to pay $10-15 a month for a business checking account.

For those located in Colorado, most of my clients prefer working with Elevations Credit Union or Bank of the West.

BlueVine and Kabbage offer business accounts with zero monthly fees.

If you have any questions related to this article or you want to book a free consultation, please contact me!